Macy’s lifts annual targets again as turnaround efforts rekindle demand

People walk into an entrance to Macy's department store at Garden State Plaza in Paramus, N.J.

Macy’s on Wednesday raised its annual sales and profit targets for the second time this year, as the department store operator begins to see returns from its months-long turnaround efforts.

The company shut underperforming outlets under its namesake banner, tested smaller store formats and broadened its online product assortment, among other measures, amid a challenging retail environment.

Department store operators have invested heavily in refreshing their stores and product offerings to revive demand and align with changing shopping trends after several years of losing out to online retailers and off-price chains.

Macy’s shares were up about four per cent in premarket trading as the company also topped quarterly net sales expectations.

Rival Kohl’s also raised its annual forecast for a second time this year last month. The company has undertaken a range of measures to restore growth, which are starting to pay off.

Macy’s expects 2025 net sales to be between US$21.475 billion and $21.625 billion, compared with its earlier forecast of $21.15 billion to $21.45 billion. It also sees annual adjusted earnings per share to be between $2 and $2.20, up from $1.70 to $2.05.

The company noted that the upbeat guidance, however, assumes consumers are more picky in the back half of the year during the critical holiday shopping period as inflation pressures spending on non-essential goods.

Macy’s, like other retailers, has leaned heavily on promotions this holiday season, with deals events running all through November for Black Friday and Cyber Monday.

For the quarter ended Nov. 1, Macy’s reported net sales of $4.71 billion, beating analysts’ average estimate of $4.62 billion, according to data compiled by LSEG, aided by strong demand at its upscale Bloomingdale’s label as well as the high-end beauty chain Bluemercury.

(Reporting by Juveria Tabassum in Bengaluru; Editing by Shinjini Ganguli)